Cenovus Energy Inc. (NYSE: CVE) said Oct. 19 it would sell its Palliser crude oil and natural gas assets in southeastern Alberta to Torxen Energy and Schlumberger Ltd. (NYSE: SLB) for C$1.3 billion ($1.04 billion) in cash to lower debt.

The Calgary, Alberta-based company is using the cash to pay down a C$3.6 billion bridge loan it took to fund its $13.3 billion deal to buy oil sands and natural gas assets from ConocoPhillips Co. (NYSE: COP).

Cenovus' ConocoPhillips deal more than doubled production to 588,000 barrels of oil equivalent per day, making Cenovus the third-biggest Canadian producer. But the purchase also made it a highly-leveraged company.

Cenovus has since been looking to offload parts of its portfolio to pay off the debt related to the deal, which sent its shares tumbling and led to the resignation of CEO Brian Ferguson.

The Oct. 19 sale will close in the fourth quarter of this year, the company said.

The deal value fell right in the middle of the expected C$1.1 billion-C$1.5 billion range, RBC Capital Markets analyst Greg Pardy said in a client note.

With the Palliser sale, Cenovus' total gross proceeds to date come to about C$2.8 billion.

Cenovus continues to target between C$4 billion and C$5 billion in asset sale agreements by the end of the year, Ferguson, who is set to leave later this month, said Oct. 19.

Last month, the company sold off its Pelican Lake heavy oil operations in Alberta for C$975 million to Canadian Natural Resources Ltd. (NYSE: CNQ) and followed that up with a C$512 million deal to sell its Suffield oil and gas assets to International Petroleum Corp.

Cenovus shares closed at C$12.22 on Oct. 18 on the Toronto Stock Exchange. (US$1 = C$1.2465)